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An executive assistant exercises considerable discretion and independent judgment for a small business and always has been classified as an administrative employee exempt from federal overtime-pay standards. However, the employee earns only $20,000 a year and now must receive overtime pay under the new rules. What recordkeeping changes are necessary?
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Answer: |
The new obligation to pay overtime carries with it a need to record more details regarding the employee's hours and wages. For both exempt and nonexempt personnel, an employer must record:
- the day and hour the workweek begins;
- total wages paid for each pay period; and
- date of payment and period covered.
For exempt employees, an employer also must be able to provide sufficient detail on the basis for wages to allow calculation for each pay period and total remuneration, including benefits and perks.
For employees who receive overtime pay, additional records must be more precise and must include:
- regular hourly rate of pay;
- the basis on which wages are paid;
- any regular rate exclusions;
- hours worked each workday and workweek;
- total daily or weekly straight-time earnings;
- total premium pay for overtime hours, excluding straight-time; and
- total additions to or deductions from wages for each pay period.
Obviously, management has to know these facts to calculate overtime pay accurately. Employers also must ensure that the additional data is recorded somewhere and preserved in the event the employee or the Wage and Hour Division later raises questions. Inadequate or improper records are a violation of the FLSA separate from any actual underpayment. Perhaps more importantly, they make it difficult to challenge the employee's claims.
Source: CCH Wage Hour Compliance Guide
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